Parsvnath Developers Receives Rs 1,200 Crore From Rail Land Development Authority
Men play volleyball near a building under construction. (Photographer: Dhiraj Singh/Bloomberg)

Parsvnath Developers Receives Rs 1,200 Crore From Rail Land Development Authority

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Parsvnath Developers Ltd. has received Rs 1,200 crore from Rail Land Development Authority as per a court order in a dispute related to a project in Delhi and said the amount will be utilised to pare debt.

Last month, the Supreme Court had dismissed the appeal of the Rail Land Development Authority challenging a Delhi High Court order directing it to pay Rs 1,034 crore to Parsvnath Ltd. in a dispute over a project in the national capital.

“We have received Rs 1,200 crore from the Rail Land Development Authority and the money is being utilised to clear debt of IL&FS and redemption of non-convertible debentures) and Optionally Convertible Debentures),” the company’s Chairman Pradeep Jain told PTI.

In 2010, Parsvnath through an auction had bought about 37 acre land located at Sarai Rohilla-Kishanganj area in Delhi from the Rail Land Development Authority for about Rs 1,650 crore.

Parsvnath had in 2011, formed a joint venture with Red Fort Capital to execute this project. The JV firm was named Parsvnath Rail Land Project Pvt. Ltd.

Later in May 2013, a development agreement was executed between the Rail Land Development Authority and the Parsvnath Rail Land Project Pvt. Ltd.

Parsvnath had paid over Rs 1,150 crore against the purchase of this land parcel, on which it proposed to develop luxury housing, commercial areas, railway housing, railway service building, hospital/school and other amenities in this project.

However, Parsvnath had in February 2016, terminated its development agreement with the Rail Land Development Authority due to a title dispute.

Then, Parsvnath Rail Land Project Pvt. Ltd. went into arbitration process to settle the issue.

As per the arbitral award, the claim of Rs 1,034.53 crore made by the company and Parsvnath Rail Land Project Pvt. Ltd. was upheld. Payment of this amount was directed to be made by the Rail Land Development Authority along with 4 percent interest per annum from July 15, 2015, till the date of payment.

Later, a division bench of the Delhi High Court dismissed the Rail Land Development Authority plea, which had challenged a single judge bench order that upheld the arbitral award of Rs 1,034 crore in favour of the real estate major.

The Rail Land Development Authority then moved the apex court which also dismissed the appeal on July 8, this year.

“We see no reason to interfere with the impugned order of the High Court. The Special Leave Petition is, accordingly, dismissed,” a bench of Justices L Nageswara Rao and Hemant Gupta had said last month.

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